“The high-tech and innovation industry is the one industry where any human, no matter what socioeconomic they are from, can have a real shot at changing the world and advancing humanity forward,” says Or Haviv, a Senior Partner and Head of the Innovation Department at Arieli Capital. “We are merely just scraping the surface of what the tech ecosystem has to offer, so for those who are quick to question its future I say, you haven’t seen nothing yet- this is not the end, this is not the beginning of the end, but this is definitely the end of the beginning!”
For Haviv, the future looks bright despite the news coming from the sector in recent months. “The tech and innovation industry is about to make its mega leaps and bring the human race into its next big stage and I can’t wait to see what’s next,” he added.
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Name of fund/funds: Ariel Capital LLC
Partners: Evan Renov, Eric Bentov, Or Haviv, Peter Lagonikos
Notable/select portfolio companies: Terrific, Elvy.ai, Powerful Medical, Mobi, NGT, BOH.
You can read the entire exchange with Haviv in the interview below.
If 2020 was the year of the pandemic, and 2021 was the year of records, how would you define 2022 in the VC sector?
2022 was the year of proportion, reason, and opportunities.
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Proportion – as startups, shied away from the period characterized by the affluence of available capital.
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Reason – as KPIs and validation took center stage.
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Opportunities – as investors found startups with the flexibility to discuss valuations, lean operations, and re-centering around core market fit values.
Who are the big winners of 2022 and why?
Everyone. Short-term views will show the lost jobs and economic hardship, which no one wishes for, long-term views, will unveil the next market leaders, the companies who are bringing significant market value, solving global industry pains, and generating real social impact side by side to considerable returns for their investors and stakeholders.
Who are the big losers of 2022 and why?
The Dalai Lama once said: “when you lose, don’t lose the lesson”. I don’t see losers; history has proven that these times produce industry leaps that help humanity advance.
What do you expect in the VC sector in 2023?
Sitting on the fence makes you miss the train. Any decision is better than no decision, sometimes we win sometimes we learn but, no movement and no achievement is made by sitting passively.
I believe that these times will drive investors to take a more holistic approach by producing real value for their companies, beyond money. Investors will check and refine their deal flow process and realign their pipelines. Moreover, investors will get involved and their portfolio companies for lean operations and a clear and transparent system of checks and balances following a clear path to high-impact, high-return KPIs.
What global processes will affect (positively and negatively) the Israeli market?
The Israeli risk-taking will have to balance with validation and revenue generation at earlier stages, but our known ability to produce cutting-edge R&D processes and to look years into the future of key industries such as agriculture, security, energy, and water will help the inflow of foreign capital and global interest in Israel, keeping the startup nation engine fueled and running through this rough road ahead.
How should different companies prepare for the coming year?
Skydivers have a saying: “when the ground is coming up fast if in doubt, cut it out”. All companies, big, small, early stage or late stage, and investors, best go back to basics. Check your core value and market fit, and focus on generating value, both economic and social. Generate revenues, strengthen partnerships, and develop new strategic relationships while cutting out loose-end partners or clients with little to no value that take away your energy and resources. Rediscover your why and the vision that got you started in the first place.
What will be of the dozens of unicorns born last year?
The true value of companies is not determined by the money they raise but rather by the market value they generate for their clients, users, data, and impact.
Companies that reached big valuations based on little to no market-added value will have little chance to outlast in the long run (regardless of the current economic downturn).
Which sectors will experience an acceleration in VC investment and which will suffer a slowdown – and why?
Core sectors will rise such as agriculture, food, water, health, wellness, education, communications, transportation, and security/safety.
People move from nice to have to must-have, and in return, the startup investment market will respond by centering around these growing demands.
HR: Do the layoffs, those that have already happened and those that are coming, help to fix in any way the distress experienced by companies over the past 2-3 years?
People, human capital, was, is, and forever will be the single most important and most valuable asset of any company. Our experience shows that people will leave a place offering them a good paycheck for a place offering them self-fulfillment.
A rowing boat could become lighter if it sends away its crew, but it will also lose its rowing power source. That said, companies that focus on superficial conditions for their employment force should remember that a ping-pong table and beer are not real competition to when an employee feels they make a difference for themselves and the world. Cut the nice-to-have expenses, your workforce doesn’t need that, offer them a job where they feel valued at the end of the day.
Investing in people is always a good bet.
Terrific Innovation, Powerful Medical, NGT HEALTHCARE 2 LP – Arieli Capital’s notable portfolio companies:
Terrific Innovation
E-commerce. A smart learning platform – Terrific Live, engineered to personally connect the brand with each of its customers through an online live shopping experience that fits each user.
Founders: Israel Grintz
Founding year: 2021
Number of employees:10
Explanation behind investment: Arieli’s offering of business development opportunities and assistance in penetrating the US market serves Terrific’s long-term goals.
Med-Tech. AI solutions that enable medical professionals to accurately diagnose and treat cardiovascular disease.
Founders: Martin Herman, Dr. Robert Herman, Simon Rovder, Viktor Jurasek
Founding year: 2017
Number of employees: 50
Explanation behind investment: We have the ability to bring Powerful Medical to the next level and help them penetrate the US market, promoting a life-changing technology and the med-tech industry.
NGT HEALTHCARE 2 LP
Health Tech. An early-stage investment entity structured as a venture capital fund focused on medical devices and life science technologies. Leveraging funds through the IIA Incubator program.
Founders: Zohar Gendler, Nizar Mishael
Founding year: 2021
Number of employees: 7
Explanation behind investment: Arieli is experienced in promoting biotech and is passionate about creating social impact. Our agenda is shared by NGT, making our investment in NGT mutually beneficial.
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